Fitch gives Emcali CCC issuer default rating

Fitch Ratings said it has withdrawn the D rating on the defaulted debt of Empresas Municipales de Cali (Emcali) and on the 10 1/8% senior secured notes due 2014 of TermoEmcali Funding Corp. Fitch said it also assigned an issuer default rating of CCC to Emcali.

The outlook is stable.

Fitch said it based its rating actions primarily on the company's successful restructuring of its financial obligations. The CCC issuer rating also considers that, despite progress is repayment of debt, leverage remains high in both absolute terms and relative to its ability to generate cash flow.

In the near- to medium-term, Fitch said Emcali will face significant challenges, including operating cost reductions, power and water losses resulting from faulty infrastructure, and low collections.

Conversely, Emcali enjoys a favorable monopoly position in Colombia's third-largest metropolitan area, providing power, water, wastewater and telephony services.

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